Accounting for Non-profit Organizations - Presley & Partners - Presley & Partners

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June 1st, 2016

Accounting for Non-profit Organizations

Brenda_E5Q8839Brenda Kelm, CPA, CGA, CA, business advisor

How cloud accounting technology can make a complex task easier

As government programs are cut back, more and more non-profits are rising up to meet community needs. On limited budgets, these organizations find volunteers and donations from the community to run their programs, in the process making our communities stronger.

For the executive directors of non-profit organizations, paying for non-program related activities – like accounting – can be difficult and requires some creativity.

Why non-profit accounting is tricky

Accounting for non-profit organizations can be tricky. In order to cover operational costs, non-profits often resort to finding small business-type activities, such as selling books, coffee and t-shirts, to help pay the bills or at least keep net costs down. These multiple revenue streams and cost-sharing between programs make for challenging financial reporting (even more complex than for most businesses). Simple accounting programs aren’t conducive to their multi-faceted reporting requirements.

Often, the funding and spending for a program don’t line up with the fiscal accounting cycle or includes capital expenditures that are accounted for differently than the program budget. And then there are “gaming” funds that need special tracking. It’s almost like they need two sets of books: one that satisfies the government authorities and one that management and funders can use to see how money was actually spent and what remains.

A Cloud solution to help simplify non-profit accounting

For growing and/or complex non-profits, a move to “Cloud technology” can provide some relief.

Benefits to moving accounting to the cloud for non-profits:

  • Expensive hardware costs are reduced and the need for periodic expenditures is turned into smaller operating costs.
  • Those governing the organization can have remote, anytime access.
  • There is increased security and backup (no more lost thumb drives or stolen laptops with the organization’s data).
  • New applications have superior, customizable dashboards and reports with multiple program and funding “dimensions.”
  • Cloud accounting and online donor tracking applications can be synced in real time, providing streamlined accounting, tax receipting and reporting.
  • The Cloud allows for scalability as the organization and data grows.
  • No more dealing with continual software updates.

 

Funds devoted to a new system are well spent and allow over-tasked executive directors to focus on delivering programs rather than building spreadsheets. Get in touch to find out more about the latest accounting technology.

Brenda Kelm is a Chartered Professional Accountant, CA and Partner with Presley & Partners, CPAs and Business Advisors, in Courtenay, BC. She can be reached at 250.338.1394 or bkelm@presleyandpartners.com.